Retail Distribution Review

Written evidence submitted by Dennis J Burling, DPI Financial Services

In respect of the impending RDR changes, further to recent press comment apparently being put forward by the CII and apparently also now by the treacherous AIFA, which I have recently left in disgust, that the majority of IFA’s support these changes, could I for one say that this particular Chartered IFA is certainly NOT in favour of the RDR as it is being proposed.

These changes if implemented will reduce significantly the number of practicing advisers in the industry, thereby reducing the availability of quality independent advice to the masses – how can this possibly be deemed in the public good!!!.

The abolition of commission, which is very well suited for many clients in cases where a low paid client cannot afford or will not pay a fee, will simply drive the less well off into the arms of the rip off banks who are sure to have a field day selling whatever they can to their unsuspecting victims. Let ’ s not forget which organisations get the majority of complaints shall we...

Further the new NEST pension system is also going to be a huge total waste of public and provider money that could have been much better spend adjusting the existing stakeholder system already in place.

Although I am well placed to benefit from the fall in numbers of my fellow advisers and in general feel that improving professionalism is a credible longer term objective, I feel that the way that the FSA is going about this is unacceptable and cannot be good for the industry in general. The current plans will simply impose higher and higher regulatory costs on a smaller and smaller IFA population, leading eventually to extinction of the species! If fees are imposed over commissions, this will increase costs even further to the client with an extra 20% added on top of current costs, all to bail out the poor cash strapped government – it ’ s no wonder that the government is so in favour of pushing it through despite huge opposition!

Already we have seen huge consolidation in the numbers of insurance groups still trading, it seems that every few weeks we hear of yet another venerable institution selling part of their business on to a consolidator – hardly any wonder when they are not being allowed to make a "filthy" profit any more. How can this help the country, employment and the govern ment tax take when thousands lo se their jobs and start drawing more state benefits as a result! 

And as for the out of control regulator – what good is a change of name if the same staff are simply going to take over again and continue to grind the industry into the dirt – how is this going to change anything!! Unfortunately we are following the USA in this respect as litigators are taking over the asylum! We still have no long stop protection as do all other professionals, claims limits are being increased even more than before and no appeal against FSA dictates without bankrupting ourselves via a judicial review.

I see now way now that I will ever be able to retire from work without the threat hanging over me of being sued well into my future retirement for advice given possibly decades earlier when a new future retrospective witch hunt review could be instigated to clear out any remaining stalwarts that may still have survived – what a future to look forward to – I remain amazed why anyone would ever wish to come into this dying industry!

So to conclude, please be very aware that the majority of IFA’s are certainly not in favour of the changes being proposed which I firmly believe are sure to weaken the whole financial services industry, which is one of the few remaining industries where the UK still has any standing and influence on the global stage.

December 2010